Consumer spending expectations have bounced a bit since the beginning of the year at the median level and at the high end. Despite the bounce, none of the trendlines have turned up.
I created the above chart after downloading data from the New York Fed’s Survey of Consumer Expectations.
- The median and low-end spending expectations peaked in April of 2014. The high-end peaked in August of 2013.
- Compared to the Excel generated trendlines, there has been a decent bounce in spending expectations at the high vs. but no bounce at the low end.
- Compared to December of 2015, there has been a nice bounce at the median and high end, but not the low end.
- Compared to February of 2016, the only bounce is at the high end.
- None of the trendlines have turned up.
Here are a few other charts from the report.
I don’t have any faith in inflation expectations, but the Fed does.
Inflation expectations are “subdued” as are income growth expectations, and household finance expectations.
If the Fed wishes to measure “confidence” the overall appearance of these charts isn’t particularly inspiring.
The bright spot is spending expectations at the high end, perhaps a measure of stock market exuberance and bonuses that most will never see.
Mike “Mish” Shedlock
August data for all the years prior seems to be quite dismal – what gives this year? Something smells or is it the Trump effect – the high end licking lips despite their apparent opposition?.
Just was at the local car dealership and talked to one of the salesmen. He had a purchase contract on the desk and in our conversation told me that the buyer was subprime and his interest rate was 27%. They can tout the growth of spending all they want. People like this are doomed to poverty due to a system that only benefits the wealthy.
Was just reading this:
“TransUnion’s study found that auto loan terms between 73 and 84 months have more than doubled between 2010 and 2015. One quarter of all loans originated in Q3 2015 were between 73 and 84 month terms, compared to just 10% in Q3 2010.”
If you go to the table, you’ll find the average interest rate for subprime borrowers on these long dated loans to be 30.7%. When I read kept thinking WTF … all the while transunion acting like business as usual.
This nonsense reminds me of the NINJA loans of 10 years ago. Kept the game going a bit longer, but ensured a mushroom cloud as end result.
http://newsroom.transunion.com/as-auto-loan-terms-lengthen-consumers-less-likely–to-complete-their-loans-to-term-new-transunion-study-finds/
Wealth has nothing to do with it, Compound interest is seventh grade math. Whoever flunks seventh grade math should not hold a license to breathe or drive.
Those trend lines aren’t moving even with recent upticks. It’s going to be a very cold winter this year.
Pretty uninspiring data……I simply can’t believe government data; it’s been manipulated for so long that whatever they claim has a much higher chance of actually being the opposite of what actually is!
I doubt economists shop for school supplies, groceries, hardware, auto parts, sporting goods, and clothes. Shoppers with a pulse notice a 30% increase in consumer retail prices. Increased spending is a given unless your credit card is maxed out.
Well well well …
I took exception yesterday to this WSJ claim in Mish’s voter discord post.
“Wage and income gains in the U.S. have improved significantly since the last presidential election, yet voters remain deeply unhappy.”
….
Lo and behold today BLS with Q2 productivity. Hourly compensation (quarter over quarter annualized rate) of -1.1%.
And Q1 revision to real hourly compensation?
“rather than increasing 4.5 percent as reported June 7. Real hourly compensation
decreased 0.4 percent after revision”
Revisions to 2014 and 2015 real hourly compensation slightly lower for good measure.
http://www.bls.gov/news.release/prod2.nr0.htm
“Inflation expectations are “subdued” as are income growth expectations, and household finance expectations.”
The big inflation expectation is healthcare premiums, which will leave less money to be spent on other things. People should save money now, to pay for next year’s insurance rate hikes.
Why bother? Much less troublesome to just work on qualifying for more subsidies stolen from the simps too old fashioned to have figured that one out yet.